The sealed-bid process for selling the minority interest in reigning Horse of the Year Curlin failed to produce an acceptable bid, but private negotiations will continue for the 20% ownership held by Midnight Cry Stable.
Sylvius H. von Saucken, a court-appointed receiver for the parent company of Midnight Cry Stable, Tandy LLC, declined to elaborate on what kind of bids were made for the minority interest, other than to say there were more than one.
“If you look at the point of the process, it was primarily established to find out what the value of the market was, to test the market, and to protect the value of the horse,” said Von Saucken. “We identified there was a market for Curlin, but also recognized that the market is depressed.”
Von Saucken said interest in a private sale of the minority interest was expressed during the sealed-bid process, which was marketed by Keeneland. Von Saucken said the receiver would pursue negotiations for a private sale of the interest, but could not elaborate on a timeline. He added that bids came in after Curlin’s disappointing fourth-place finish as odds-on favorite in the Oct. 25 Breeders’ Cup Classic (gr. I) at Santa Anita Park.
Kentucky state judge Roger Crittenden had approved the sealed-bid process requested by the receiver in September, which chose that avenue over attempts to sell via public auction or a private deal. Von Saucken said Crittenden has been informed of the receiver’s decision, which was made with the help of unidentified experts in the industry.
"The question was did we have an acceptable bid to present to the court? And the answer was no," von Saucken said.
The sealed-bid process from the beginning was intended to help the receiver establish a “maximized value” for the 20% interest, the receiver argued, but could have also resulted in the ultimate sale of the minority ownership if certain criteria were met.
Under terms of the 2007 purchase of Curlin from Midnight Cry, 80% majority owner Stonestreet Stables retains a right of first refusal on any sale of the minority interest. An attorney affiliated with Stonestreet and its principal, Jess Jackson, said no decisions can be made on the future of Curlin.
“Because it was a sealed-bid process, we’re not privy to what bids were received or what the bids were,” said Kevin McGee, a vice president of Stonestreet Stables who is also personal counsel to Jackson and his myriad of business operations. “We are slightly disappointed that this process has gone on this long. We would like to get some definition to the process.
“The receiver is managing the 20% interest of Curlin, and it’s their decision. We don’t have any authority or influence in the situation.”
Von Saucken said Stonestreet Stables was kept apprised of certain aspects of the sealed-bid process, because it couldn’t be operated “in a vacuum.”
“What we do realize is that time is of the essence,” von Saucken said. “We don’t have any control over if (Curlin) is retired or not. We have an obligation to protect the value of the horse, and the sealed-bid process told us something about the market that it didn’t before. The market has spoken.”
Tandy is managed by recently-disbarred attorneys Shirley Cunningham Jr. and William Gallion, who are battling criminal and civil actions in relation to their role in handling the $200-million settlement realized in the prominent class-action suit involving the diet drug fen-phen. A Kentucky state judge previously awarded a $42-million judgment in the civil trial against the two attorneys and others, and the potential sale of Curlin’s minority interest was ordered to help satisfy those judgment obligations.
Keeneland was commissioned to help market the minority interest, and director of sales Geoffrey Russell said there was “great interest” in Curlin.
“From our perspective, there was great interest in the horse, and a great love of the horse,” he said. “I think he has a very large fan base, both in the breeding shed and on the race track.”
An attorney representing Tandy earlier tried to halt the sealed-bid process through a court motion, saying the marketing strategy would not yield the highest market value. Von Saucken said the motion was denied in October by Crittenden, allowing the process to proceed.